Plug and Play | Co-Founder & Vice President | Jojo Flores
TechShake recently had the opportunity to interview Jojo Flores, the co-founder of Plug and Play, a Silicon Valley-based accelerator and incubator firm. Flores is also the co-founder of Launch Garage, which is an innovation hub based in Quezon City. In this interview, he shared his experiences and broad ideas on how he plans to nurture the start-up ecosystem in the Philippines.
Q1: “What is the story behind Plug and Play?”
I was born and raised in the Philippines. I graduated from the University of the Philippines-Diliman with a degree in Business Administration. Shortly after graduating from college, I worked in First Pacific, an investment and holding company. When I joined them in 1991, they still had several businesses in the consumer industry. I worked as a management trainee there. One of the projects assigned to me was to start a bottled water business in the Philippines, so I operated Metro Bottled Water Corporation (Wilkins) from 1992 to 1995.
On one of my trips in the United States, I met an Iranian-American businessman named Saeed Amidi. I became good friends with him. His family owned a couple of businesses including American Liquid Packaging Systems (ALPS), and it became the supplier of equipment and technology for my company. In 1995, it was in the process of being sold to La Tondeña Distillers Inc., now known as Ginebra San Miguel Inc. I decided to leave the company after it was bought. During the same year, Saeed came over to the Philippines and told me to open another water company in Europe. I thought it was a brilliant idea, so I decided to collaborate with him. I lived in Europe for ten years, and during my time there, he and I had put up twelve joint ventures across the continent.
During one of our board meetings, he told me, “You look bored. Why not come back to the US with me? Let us start a new company together.” This happened during 2005, ten years after our stint in Europe. Something must have come to my mind because I agreed to his proposal. I came back to San Francisco in the middle of the year with the goal of starting another business with Saeed. Our new venture for that year was Plug and Play Tech Center, and it was officially launched in 2006. Plug and Play is a global innovation platform that connects start-ups to investors and corporations worldwide. We also invest in over a hundred companies each year. During our first few months, we only had 20 companies in our portfolio and did three investments only. But ever since 2006, we had helped over 2,000 start-ups already.
One of the things we do is to help our start-ups in raising money. Our community of startups have already raised in excess of $3.5 billion since 2006. We also want to connect them to the 300 corporations worldwide that we are currently working with. These corporations want to have an innovation strategy, so we gave them one. They could buy the start-ups if given the choice, or they could provide them services and products. Innovation is the goal of our company. Plug and Play is dedicated to accelerating the ingenuity of start-ups. Their collaboration with our corporate partners is the key to their success because they could validate their ideas and could help the allocation of their funding.
I moved back to the Philippines last 2012 because my family wanted me here. I am still involved with the activities of Plug and Play, but only at the board level. When I came back, the global start-up fever was still with me. For the past three years, Jay Fajardo (ProudCloud) and I have been planning to create an innovation hub. This year 2016, something has changed in the start-up scene of the Philippines, and we felt it was a good time to introduce Launch Garage, our recent joint venture. Our idea was to create a place that could attract the best start-ups in the country. Our company also provides opportunities for investors by showcasing start-ups that have good potential. Also, if a one of our start-ups wants to have the potential to grow, I would bring them to Plug and Play to expand their market once.
Launch Garage would be the stepping-stone for Filipino start-ups to globalize.
Q2: “Could you use Japan and Germany’s start-up ecosystem as an example for future reference?”
Germany and Japan are different from other countries in my opinion. Both are one of the most innovative countries in the world. They are the frontier of creativity and modernization. The only difference they have is their own start-up ecosystem. Germany’s Berlin is the fastest growing start-up ecosystem in the world according to recent studies. Meanwhile, Japan, although renowned for its technological prowess, has a shrinking market. After the success of Japan’s post-war electronics companies, the appeal of working for established businesses rather than creating their own start-ups created a risk-averse culture.
However, they do have a similarity. Both possess an aggressive nature when it comes to their ventures. I have worked with a couple of German companies for Plug and Play. It took a lot of time before they understood the benefits of partnering with us. Once they did, they were very aggressive. They immediately took actions for partnering with us. The same goes with our Japanese partners. Both of their outlooks in investing in start-ups are different from other countries like Spain, France, and Italy.
Q3: “What is the difference between the start-up ecosystem in the Philippines and in the United States, particularly in Silicon Valley?”
Their difference is the mindset of its citizens. The success of Silicon Valley does not happen overnight. It is the product of hard work done in the past 60 years. Its entrepreneurs are willing to take high risks. They accept failure because they know it is necessary for growth. In addition to that, the level of entrepreneurship in the United States is very high because its students are visionaries, while most students in the Philippines are not. Filipinos need to start dreaming big and start creating endless possibilities for their future.
Q4: “How would you increase the number of start-ups in the Philippines?”
The Philippines has limited resources. You have to be more efficient to thrive. If you have more money, you could take more risks. If you have less money, you could take fewer risks. That is the main hurdle for our country. If you are a smart person and has finished your tertiary education, it is riskier to establish a start-up than to join a corporation. Again, it is all based on the economics. That is why we welcome outside investors. Foreign investors put more resources in start-ups, providing more capital for riskier ventures. By increasing the number of resources, the risk would become smaller.
There are big companies here, but most of their funds go to real estate and retail businesses. We are currently trying to convince them to allocate a portion of their investments for start-ups. Furthermore, we want to invite foreign investors in the Philippines. If we could focus on distributing more funds for future business ventures, we could increase the number of start-ups. But this should not be a one-sided solution. We also encourage local start-ups to join the ecosystem. We do this at Launch Garage and at universities by building incubators. I work closely with the government to promote techno-entrepreneurship as well.
Q5: “What are the challenges your company encounters?”
Our main challenge is the lack of success stories. Our first success story is Xurpas, and that is the only one we have. We need more stories so investors could start making bets. The other challenge is their education. We provide education by inviting them to our company to see our operations and also by sharing the stories of our successful start-ups. To see is to believe, as they say. If I bring them to Plug and Play, in one hour they would want to invest in the Philippines. This I could guarantee you.
Q6: “Since you have mentioned that you and Jay Fajardo recently started a company, could you tell us more about it?”
We set up Launch Garage to lower the hurdles of international investors. If they would know Jay Fajardo is one of the founders, they would trust our company. Jay is like the Paul Graham of Y Combinator. He knows his way in innovation. He is also good with technology and is a veteran in the start-up field. That is why he and I make a good team. I’m not into technology like he does, but I have a good network. Foreign investors come to us to be taught. We give them tips on the basics of investing in the Philippines. We also introduce them to companies that would be good for their investment.
If you are a company, an investor, a mentor, or an advisor, you could come to Launch Garage. We could be your one stop solution. We are building a whole community of local start-ups here.